How Much House Can I Afford?
A common starting point is the 28/36 rule: keep your housing payment at or below 28% of gross monthly income, and total debt payments at or below 36%. But affordability also depends on your down payment, debts, credit, and the loan’s rate — so the honest answer is "it depends," and a lender’s pre-approval is the real number.
Frequently Asked Questions
How much house can I afford?
A quick rule of thumb is that your total home payment (principal, interest, taxes, insurance, and any HOA/MUD) should stay around 28% of your gross monthly income, with all debts under about 36%. But the real figure depends on your down payment, existing debts, credit score, and the current interest rate. A lender’s pre-approval turns those into a specific maximum price for you.
What income do I need to buy a $300K, $400K, or $500K house?
It depends on your rate, down payment, debts, and Texas property taxes (which are higher than average), so any figure is a rough guide. As a ballpark at prevailing rates, buyers often need roughly $75K–$90K income for a $300K home, $95K–$115K for $400K, and $120K–$145K for $500K — more with high property taxes or other debt. A lender can model your exact case.
What’s the 28/36 rule?
It is a lending guideline: spend no more than 28% of your gross monthly income on your total housing payment (the "front-end" ratio) and no more than 36% on all monthly debt including the mortgage (the "back-end" ratio). Many loan programs allow higher back-end ratios, but 28/36 is a conservative target that leaves room in your budget.
What debt-to-income ratio do lenders want?
Debt-to-income (DTI) is your monthly debt payments divided by gross monthly income. Many lenders prefer a back-end DTI at or below about 43%, though programs like FHA, VA, and conventional can approve higher ratios with strong compensating factors (reserves, credit, down payment). Lowering other debt before applying raises how much home you qualify for.
How much money do I need upfront?
Plan for three buckets: the down payment (0%–20% depending on loan), closing costs (about 2%–5% of the loan), and reserves (a few months of payments some lenders want to see). On a $350K home that can range from well under $20K with a low-down-payment or VA/USDA loan to $85K+ at 20% down. Down-payment assistance can reduce the cash needed.
How much house can I afford on a $100K salary?
On roughly $100,000 a year (about $8,333/month gross), the 28% guideline puts your total housing payment near $2,300/month. At prevailing rates and typical Austin-area property taxes, that often supports a home somewhere in the mid-$300Ks to around $400K, depending on your down payment, debts, and rate. Treat it as a starting range and confirm with a pre-approval.
Keep going
Informational only — not lending, financial, or tax advice. Loan terms, rates, and fees vary by lender and change often; confirm current numbers with a licensed mortgage lender (and a CPA for tax questions).
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